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Royal Dutch Shell Plc .com: Sibir Energy sees ‘substantial’ FY profits from Salym

From AFX UK (Focus)

LONDON (AFX) – Sibir Energy PLC said it expects to report substantial profits in 2006 from its Salym fields in western Siberia, which it jointly owns with Royal Dutch Shell PLC.

Earlier this month, Sibir said production at the Salym fields had exceeded 50,000 barrels per day and had dramatically increased since it went on stream last December.

At the end of 2005, Sibir said, it contributed to the joint venture in share subscriptions, share premium and loans of over 400 mln usd. This has now increased to 510 mln usd and according to the company’s latest estimates it has a further 21.5 mln usd to be contributed before Salym becomes self funding. It added it expects repayment of the loans to start in the second half of 2007.

The Russian oil firm reported it had cut its pretax loss to 10.9 mln stg for the full year to Dec 31 2005 from a loss of 30.4 mln the year before.

Group FY operating profit before its share of operating loss from the Salym joint venture was 29.9 mln stg compared to operating profit before exceptional items of 6.5 mln in 2004. The improvement, it said, from the prior year is due mostly to the increased margins achieved as a result of higher oil and oil product prices, as well as a production increase in Magma.

The Group’s share of losses from SPD of 21.0 mln stg have increased from 15.2 mln stg in 2004, reflecting the increased activity of the joint venture.

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